1. I disagree. I'm curious as to the precise moral dimension you're talking about here.
2. You're kidding yourself if you think you can stop it, or that by plugging your ears and closing your eyes you can make it all go away.
Most of your argument seems to be that because artists rely on selling copies now, that it must always be so. The fact is, artistic expression predates copying technology. Art fits into the technological capabilities that exist, not the other way around. Before image copying tech, artists made paintings, drawings, and sculptures, and sold them. There were other business models as well, like private and religious patronage. In ancient times, oral poets travelled and essentially gave live concerts. Dramatists had state sponsorship. Many of these business models and even entire mediums died out as our technology changed. That's what happens.
Maybe authors as we know them will figure out a way to survive, or maybe they'll die out. Same goes for filmmakers, musicians or any other artists. There's nothing special about the particular art forms we have now.
I keep talking vaguely about alternative business models because we're at a transition point. They haven't been invented yet.
"Nobody's going to invent an ingenious new way of making money out of music. There's live performance or there's selling intellectual property. That's it."
That's the spirit! You'd better tell Amanda Palmer, though, I don't think she got that memo.